KUALA LUMPUR: Bursa Malaysia Bhd is looking to restructure the LEAP Market to "fit it" with the country's fundraising ecosystem.

Bursa Malaysia chief executive officer (CEO) Datuk Muhamad Umar Swift said his team was "revisiting" and reaching out to those who used the secondary market to determine the right fit for LEAP Market participants.

"We are reviewing the landscape, developments in initial exchange offering and equity crowdfunding. We are looking at the total ecosystem holistically to see where it fits."  

The low number of listings on the LEAP Market has called for the need to revisit its guidelines to ensure the platform is competitive and meets investors' needs.

Last year, the LEAP Market only managed to secure one listing, a reason why Bursa Malaysia missed its initial public offering listing target for the year. 

Of the 42 IPOs in Bursa Malaysia's pipeline this year, the LEAP Market is expected to record one listing.

Umar said the bourse often needed to ensure that the LEAP Market was competitive and at par with other offerings. 

"Benchmarking process is taking place. The feedback we have received is that fees payable for funds raised are a little high but there is a certain rigour to this thing. The key thing to remember, as a security, is to just balance up that degree of rigour with the offering to the market," he added. 

The LEAP Market aims to bring together small and medium enterprises, intermediaries, sophisticated investors and advisers onto a single platform to create a conducive marketplace to raise funds. 

Under the Schedules 6 & 7 of the Capital Markets and Services Act 2007, sophisticated investors are categorised as accredited investors, high net-worth individuals and high net-worth entities. 

Examples include an individual whose total net personal assets exceed RM3 million, or equivalent in foreign currencies, or an individual who has a gross annual income exceeding RM300,000, or equivalent in foreign currencies, in the preceding twelve months. 

Tradeview Capital fund manager Neoh Jia Man said the restructuring of the LEAP Market was necessary due to its low trading volume.

"In addition to expanding the investor base beyond sophisticated investors, we think that Bursa Malaysia could implement a higher public spread requirement, as the current 10 per cent limit does not seem to generate enough free float to attract investor interest," he said. 

Neoh applauded Bursa Malaysia's introduction of a transfer framework last year  as it offers LEAP Market-listed firms a clearer path to migrate to the ACE Market.

"This enhancement makes the LEAP Market a more appealing avenue for fundraising purposes," he said. 

An industry expert said the current liquidity in the LEAP Market was not sufficient and not attract ing the crowd. 

"The whole idea of listing a company is to have liquidity to trade. But if a company is listed and not many people can trade or have interest in the stock, it is not decent for both parties. 

"With low liquidity and limited to only sophisticated investors, the LEAP Market has locked out resources," said the expert who did not want to be named. 

In March last year, the exchange issued amendments to the ACE Market Listing Requirements which will facilitate eligible LEAP Market-listed corporations to graduate to the ACE Market.

https://www.nst.com.my/business/corporate/2024/04/1039836/bursa-malaysia-working-make-leap-market-right-fit-investors-and